‘More work needed’ on tackling pension income for women

A government-commissioned review of the state pension age has asked for more information on how to make sure any changes to entitlements take women’s lower pension incomes into account.

Former Confederation of British Industry director general John Cridland was asked by the government to lead a review of the state pension age in March.

In a preliminary report outlining key issues the review will address, Cridland asks stakeholders for suggestions on how to take women’s lower pension incomes into account in future state pension age changes.

The review estimates men have around a 25 per cent higher income than women in their first year of retirement, a difference of around £3,000.

Cridland says this gap will narrow for those born between 1966 and 1979, but is likely to widen again thereafter.

He says this is because, while auto-enrolment coverage and the decline in defined benefit incomes will benefit women more than men, men’s “higher earnings and women taking time out of the labour market” would offset this.

The report reads: “Women appear to be consistently overrepresented in the most impacted groups. We do recognise for many couples today decisions around work and caring have been taken jointly and for them the important factor may be overall household pension income.”

It then asks for feedback on the question: “What is the best way to take into account the lower pension outcomes for women in our recommendations?”

The report does not directly reference the Women Against State Pension Inequality campaign, which calls for transitional measures to mitigate increases in women’s state pension age for those born in the 1950s.

However, it does note the campaign from 1950s women has caught the public’s eye.

The report reads: “State pension age is currently a subject of national interest and captures public attention both as a good news story, when looking at the improving longevity statistics, and equally as an issue of discontent, for groups that feel disadvantaged by recent policy developments. Women born in the 1950s are currently a significant group in the latter category.”

The scope of the review is only to look at future entitlements and not current arrangements.

The report says: “Men and women across all generations are set to receive very similar amounts of state pension. The discrepancy in pension outcomes for men and women instead reflects different private pension outcomes.”

It says submissions have also been received on the idea of early access to the state pension, allowing those with a high number of qualifying years to claim the full state pension before state pension age.

Other groups the report will look at further to assess the impact of state pension age changes are the disabled and ethnic minorities who are disadvantaged in the labour market so face challenges in building up pensions.

The interim report estimates by 2064/65, pensioner spending by the Government will reach 8 per cent of GDP, up from just over 6 per cent now.

Retirement Advantage pensions technical director Andrew Tully says: “Set against a backdrop of an ageing society, costs for funding the state pension are predicted to rocket…so something will need to give. Accelerating increases to the state pension age seems inevitable.”

One hopes that as Cridland has seemingly acknowledged the Waspi campaign he will also have taken into consideration the plight of the frozen pensioners who have been suffering and campaigning against their injustice for far, far longer.
Perhaps he expects the government will have seen the light of day and abolished Section 20 of the 2014 Pensıon Act long before his report is published and becomes relevant.

Apart from the WASPI campaign where the injustice is obvious I’m pleased to see that Andy Robertson-Fox has mentioned the Frozen Pensioners. It must be realised that some of these ladies will be affected by this other serious pension issue giving them double punishment when they have all paid their contributions under the same conditions as all of the deprived frozen pensioners some of who are disabled and from ethnic minorities.
The Government must address these issues in a compassionate and honest way with the same passion that they do in funding overseas aid where cost seems to be of little consequence.

The WASPI women are getting their grievances aired almost daily in the news media but the 4% who have a frozen state pension are as usual forgotten. Unlike the WASPI’s their fight for justice has been going on for decades and the oldest have lost the most, many thousands of their pension money withheld by successive governments. This is an outrage that is hardly ever discussed by politicians, this money belongs to the pensioners not the government and the government has no right to stop the pensioners cost of living increases. All state pensioners have paid for their pensions under the same terms but 4% are being treated unfairly, this is called discrimination, and the UK government is guilty of breaking this law with impunity. A private pension provider would not be allowed to do this so why is the government getting away with it?

Granted, 1950’s born women have had a rough deal on the pension front. But as other contributors have already pointed out, there are other British pensioners who have paid as much – and in many cases more, for diminishing returns. Because that’s what a British Frozen Pension is, it’s a diminishing return on money you contributed (invested) towards your future pension.
For the government to freeze it, and to deny you the annual increases everyone else gets is downright theft. I paid 44 yrs NIC and for what? Because I’m retired in Canada with my family, my pitiful pension is frozen for as long as I breathe air. If I’d retired to the USA I would get annual increases. If that’s not theft – if that’s not fraud, what is??